Vodafone Idea stocks in focus ahead of February 27 board meet on equity fundraising

Vodafone Idea Ltd shares are in focus on Friday's trade after the telecom operator said a meeting of its board of directors would take place next week on Tuesday, February 27, to consider and evaluate proposals for raising of funds in one or more tranches by way of a rights issue, further public offer, private placement including preferential allotment, qualified institutions placement (QIP) or through any other permissible mode.

Vodafone Idea said it could also decide on a combination of these permissible mode, as may be considered appropriate, by way of issue of equity shares or by way of issue of any instruments or securities including securities convertible into equity shares, Global Depository Receipts (GDRs), American Depository Receipts (ADRs) or bonds including foreign currency convertible bonds (FCCBs), convertible debentures, warrants, and/or non-convertible debentures (NCDs) including non-convertible debentures along with warrants, which may or may not be listed.

"The trading window for dealing in securities of the Company shall be closed from Friday, 23rd February, 2024 till Thursday, 29th February, 2024 (both days inclusive)," it said.

Vodafone shares had settled 6.27 per cent higher at Rs 16.28 in the previous session after the Aditya Birla group chairperson Kumar Mangalam Birla said his group was committed to Vodafone and its investors.

Following Vodafone Idea's quarterly results, analysts at Nuvama had said that they would remain watchful of the capital-raise and ARPU trajectory. Vodafone Idea needs to ensure it does not fall too far behind its peers in the 5G rollout, the brokerage suggested, as it cut FY24 estimates for Vodafone Idea, mainly due to postponement of tariff hikes and lower subscriber addition due to lagging capex.

"Our FY26 estimates do not yet include spectrum dues repayment as the moratorium period ends. Our valuation too, does not include AGR dues," it said while suggesting a target of Rs 7 on the stock.

Vodafone Idea's reported subscriber count was down 14 lakh month-on-month (MoM) in December 2023, as subscriber loss picked up from 11 lakh MoM in November.

"The VLR base was down by 18 lakh MoM (vs a 1 lakh increase in November 2023), as the VLR proportion declined to 88.2 per cent in Dec-23 from 88.5 per cent in Nov-23. VIL lost VLR subscribers in 14 of the 22 circles MoM in Dec-23. Maharashtra was the major positive contributor to the VLR, while UP (West), Delhi, and Tamil Nadu were the major laggards. Vi’s overall subscriber loss picked up again in Q3, at 46 lakh QoQ vs 16 lakh QoQ loss in Q2, as Jio continued to gain market share from Vi," Emkay Global said.

Also read: Tata Elxsi: Tata group stock in focus today. Here's why